Naryn Rural Water Supply and Sanitation Development Program (RRP KGZ 52256) Detailed Program Safeguard Systems Assessment Project Number: 52256-001 October 2019 KGZ: Naryn Rural Water Supply and Sanitation Development Program ABBREVIATIONS ADB – Asian Development Bank ARIS – Agentstvo Razvitya i Investirovanya Soobshestv (Community Development and Investment Agency) CSC – construction supervision consultant DDWSSD – Department for Drinking Water Supply and Sewerage Development EA – executing agency EARF – environmental assessment review framework EIA – environment impact assessment EMP – environmental management plan FI – financial intermediary IA – implementing agency IEE – initial environmental examination IFC – International Finance Corporation LARP – land acquisition and resettlement plan Leq – equivalent sound pressure level NGO – nongovernment organization NRWSSD – Naryn Rural Water Supply and Sanitation Development Program O&M – operation & maintenance PC – public consultation REA – rapid environmental assessment RBL – Results-based lending RP – resettlement plan SAEPF – State Agency of Environmental Protection SPS – safeguard policy statement SSEMP – site-specific environmental management plan WHO – World Health Organization NOTE In this report, "$" refers to United States dollars unless otherwise stated. CONTENT A. Program Environmental and Social Impacts and Risks 5 1. Environment 5 2. Involuntary Resettlement 6 3. Indigenous Peoples 6 B. Safeguard Policy Principles Triggered 6 C. Diagnostic Assessment 7 1. Assessment Methodology and Resources 2. Environment 7 3. Involuntary Resettlement 8 4. Institutional Arrangements and Capacity 11 D. Safeguard Program Actions 14 APPENDIXES 1. Safeguard Policy Principles Triggered 2. ARIS Safeguard Capacity & Systems Assessment 3. Field Visit Reports – Environment & Social Safeguards 4. Integrated Risk Matrix 5. Legislative and Institutional Framework in Kyrgyz Republic 6. Rapid Environmental Assessment Checklist – Water Supply 7. Rapid Environmental Assessment Checklist – Sewage Treatment 8. Involuntary Resettlement Checklist for the Rapid Involuntary Resettlement Assessment 9. Site Selection Criteria 10. Comparison of LAR Provisions between ADB Policy and Kyrgyz Legislation 11. Environmental Assessment Review Framework 12. Land Acquisition & Resettlement Framework 13. Suggested Loan Covenant 1 DETAILED PROGRAM SAFEGUARD SYSTEMS ASSESSMENT 1. The national development strategy, 2018–2040 prioritizes access to clean drinking water and sanitary facilities for all settlements in the country, through construction and rehabilitation of infrastructure, proper operations and maintenance, and financial and institutional sustainability of water supply and sanitation (WSS) systems. The strategy aims to provide clean drinking water to 95% of settlements in the country, with over 2 million people in 653 villages in rural areas having access to a centralized water supply. The results-based lending (RBL) Naryn Rural Water Supply and Sanitation Development Program (NRWSSDP, or program) shall assist government improve water and sanitation systems in 43 villages in Naryn oblast.1 In line with the strategy of the Asian Development Bank (ADB), the program will support the national development strategy to provide access to safe water supply and improved sanitation for rural communities in Naryn oblast. 2. The proposed ADB financing will be aligned with the following impacts: (i) decent living standards for each Kyrgyz citizen achieved, and (ii) health, quality of life improved, and adverse environmental impact reduced by 2026.2 The program will have the following outcome: improved, inclusive, and reliable access to safe WSS services in rural communities in Naryn oblast. 3. At the impact level, the RBL program is aligned with the government’s goal of improving the health and quality of life of residents and reducing adverse environmental impact by 2026.3 The program’s outcome will be an enhanced, inclusive, and reliable access to safe water supply and improved sanitation facilities for rural communities in Naryn oblast, with a priority focus on 64,000 population.4 The ADB shall be providing $27.4 million (83%) as financial support for the program while counterpart funding from the government will be $5.5 million (17%). 4. The two output level results that will contribute to the outcome of the program are as follows: Output 1: Water supply and sanitation infrastructure expanded and sanitation solutions piloted. The program will include the following infrastructure components: (a) safe water sources, water storage, and treatment and disinfection systems; (b) distribution networks for the target population of 64,000; (c) gender-sensitive safe water and sanitation facilities in selected kindergartens, schools, and health facilities; and (d) piloting of non- networked household sanitation solutions. Output 2: Institutional capacities strengthened for enhanced sustainability in the rural water supply services and sanitation sector. Output 2 focuses on institutional measures to strengthen WSS systems and improve service delivery. It will (a) establish and strengthen WSUs and secure at least 20% female participation across all WSUs by 2025, and 40% female participation in WSU-related trainings and public consultations; (b) deliver financial management training to further enhance internal control processes and procedures for ARIS and WSUs; (c) adopt and apply a procurement manual and a multiyear procurement action plan; and (d) develop and implement an M&E framework to improve knowledge of asset inventory and data management. 1 Government of the Kyrgyz Republic. 2018. National Development Strategy of Kyrgyzstan for 2018–2040. Bishkek. 2 ADB. 2018. Concept Paper for KGZ: Naryn Rural Water Supply and Sanitation Development Program. Manila. See the design and monitoring framework. 3 Government of the Kyrgyz Republic. 2016. Strategy for Development of Water Supply and Sewerage Systems in Settlements of the Kyrgyz Republic until 2026. Bishkek. 4 If more funds are mobilized during the program period, coverage will be expanded from 64,000 to 90,000 population (which is the estimated population of 43 villages in Naryn oblast identified by the Government for ADB support). 2 5. The RBL is a suitable modality for the proposed program for the following reasons: (i) The government has a sound rural WSS program and a vision for the sector, which provide a clearly defined scope for development partners’ support. (ii) Given ADB’s prior involvement in the rural WSS sector, the RBL modality provides the opportunity for all stakeholders to work together and demonstrate strong commitment to achieving verifiable results. (iii) Institutions in the sector still need strengthening, notably in procurement, internal audit function, and sustainable management, operations and maintenance of water and sanitation facilities at community level; the RBL program offers the opportunity and provides incentives in its program design. (iv) The institutional strengthening mechanisms which are part of the RBL program will pave the way for ADB’s stepped-up engagement in the rural WSS in the near future. (v) The RBL financing modality will sharply reduce transaction costs. On the other hand, an investment loan would involve high transaction costs because the Naryn program design involves multiple small transactions at village and raion level. (vi) The RBL modality will provide a platform for the government to coordinate the support of donors around a common set of agreed results, improving development coordination and resource mobilization for the sector. 6. The eight proposed disbursement-linked indicators (DLIs) for the RBL program are provided in Table 1 below, although none of the DLIs is directly related to implementation of safeguards measures. 7. The indicative program scope will include (i) development and rehabilitation of water supply networks and related infrastructure; (ii) piloting of non-networked sanitation solutions; and (iii) establishment of sustainable operational models, including development of local capacity and community based operational management. I. Table 1: Program Disbursement-Linked Indicators Disbursement Share of Allocated Total ADB Disbursement-Linked Indicator ($ million) Financing (%) Outcome DLI 1. By 2026, at least 64,000 people in the villages of Naryn oblast use potable 8.22 30 water DLI 2. By 2026, at least an additional 13 village schools and/or kindergartens and 8 2.74 10 health facilities served by improved gender-sensitive water and sanitation facilities Outputs DLI 3. By 2025, detailed design of infrastructure completed for 43 villages 0.55 2 DLI 4. By 2024, infrastructure components for water supply and distribution networks 9.04 33 in place for at least 64,000 population DLI 5. By 2023, non-networked, household sanitation solutions piloted in at least 2 1.37 5 villages with minimum combined total of 660 households DLI 6. Procurement manual developed and implemented for the RBL program from 1.37 5 2020 DLI 7. By 2026, 100% of internal audit staff and finance staff of ARIS trained in internal 1.37 5 audit and financial management, respectively, by a nationally recognized institute DLI 8. By 2026, WSUs fully operational and financially sustainable, with at least 20% 2.74 10 female participation in WSUs, and 40% female participation in WSU-related trainings and public consultations Total 27.40 100 3 ADB = Asian Development Bank, ARIS = Agentstvo Razvitya i Investirovanya Soobshestv (Community Development